John Georgievski

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On September 29, the Financial Crimes Enforcement Network (“FinCEN”) entered into a consent order with Shinhan Bank America (“SHBA”), which imposed a $15 million dollar civil penalty against SHBA for allegedly willfully failing to implement and maintain an AML program that meets the minimum requirements of the Bank Secrecy Act (“BSA”), and for allegedly willfully failing to accurately and timely report suspicious transactions to FinCEN.

In its press release, FinCEN noted that, as a result of SHBA’s inactions, “tens of millions of dollars in suspicious transactions were not reported to FinCEN in a timely manner, including transactions connected to tax evasion, public corruption, money laundering, and other financial crimes.”

Working in collaboration with FinCEN, the FDIC also separately issued a civil penalty against SHBA in the amount of $5 million dollars – which FinCEN will credit toward its own fine, leaving an amount owed of $10 million dollars – and the NYDFS also issued a stand-alone civil penalty in the amount of $10 million dollars.

As we will discuss, this enforcement action involves several typical allegations by the government, including an alleged failure to file required SARs, prior regulatory problems, and insufficient AML compliance staffing and funding.

Continue Reading  FinCEN Issues $15 Million Dollar Civil Penalty Against Shinhan Bank America for Alleged Failure to Implement and Maintain Effective AML Compliance Program

Notice Also Stresses New BSA Whistleblower Provisions

On July 26, the Department of Commerce, the Department of the Treasury, and the Department of Justice released a joint compliance notice (the “Compliance Notice”) updating and summarizing each agency’s position regarding the voluntary self-disclosure by businesses of potential violations of sanctions, export controls, and other national security laws.

Asserting that voluntary self-disclosure can provide many benefits to a reporting business – potentially providing for a non-prosecution agreement or a 50 percent decrease in “base penalties” – the Compliance Notice provides each entity’s current position as to voluntary self-disclosure.  The Compliance Notice also references the still-evolving whistleblower program under the Bank Secrecy Act (“BSA”), which now pertains to not only potential BSA violations, but also potential violations of sanctions law.

Continue Reading  “Tri-Seal” Compliance Notice: U.S. Authorities Release Joint Guidance on Voluntary Self-Disclosure of Potential Sanctions and Export Control Violations

First of Two Blog Posts in a Series Pertaining to Attorneys Convicted of Money Laundering

In February, we blogged on the indictment of Vladimir Voronchenko (“Voronchenko”) in the Southern District of New York (“SDNY”), who was charged in connection with a scheme to make payments to maintain multiple properties in New York and Florida owned by his friend and associate, sanctioned Russian oligarch Viktor Vekselberg (“Vekselberg”).  The February indictment also contained allegations that Voronchenko had retained a then unnamed U.S.-based attorney to help carry out those alleged money laundering activities.

On April 25, the U.S. Attorney’s Office for the SDNY announced that Robert Wise (“Wise”), a New York attorney, had pled guilty to a single count of conspiring to commit money laundering, in violation of 18 U.S.C. § 371.  The substantive offense that was the object of the conspiracy was 18 U.S.C. § 1956(a)(2)(A), which criminalizes the act of transferring monetary instruments or funds into or outside of the United States with the intent to promote the carrying on of specified unlawful activity.  Interestingly, the superseding information charges Wise with violating the general criminal conspiracy statute, Section 371 (which carries a statutory maximum sentence of “only” five years), rather than violating the specific money laundering conspiracy provision, 18 U.S.C. § 1956(h) (which carries a statutory maximum sentence of 20 years).  It is unclear whether Wise is cooperating with investigators.

In our next post, we will discuss the Fourth Circuit’s affirmation of attorney Kenneth Ravenell’s conviction at trial for money laundering conspiracy, in violation of Section 1956(h).

Continue Reading  New York Attorney Pleads Guilty to Conspiring to Commit Money Laundering in Connection with Indicted Russian Oligarch

Alleged Evasion Through a Law Firm Account and High-End Real Estate

On February 7, 2023, the U.S. Attorney’s Office for the Southern District of New York announced the unsealing of an indictment charging Vladimir Voronchenko (“Voronchenko”) with participating in a scheme to make payments in excess of $4 million dollars to maintain four properties located in the United States that were owned by Viktor Vekselberg (“Vekselberg”), a sanctioned Russian oligarch (whose own issues we have blogged on here). Additionally, the indictment also charges Voronchenko, a citizen of the Russian Federation and legal permanent resident of the United States, with contempt of court in connection with his flight from the United States following receipt of a grand jury subpoena on May 13, 2022, which required his personal appearance and testimony. He has not returned to the United States since.

As we discuss, the indictment implicates several issues on which we blog frequently, including evasion of Russia sanctions relating to the Ukraine; the potential exposure of lawyers to money laundering risks; and the potential exposure of real estate professionals to money laundering risks.

Continue Reading  Russian Citizen Indicted for Making Payments on Behalf of Sanctioned Russian Oligarch

Department Focuses on Transfers of Virtual Currency

On August 8, 2022, the District of Columbia Department of Insurance, Securities and Banking (the Department”) issued a Bulletin on money transmission (the “Bulletin”).  The Department issued the Bulletin to ensure that parties “engaging in or planning to engage in money transmission with Bitcoin or other virtual currency…